Professional Documents
Culture Documents
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* EN BANC.
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PERALTA, J.:
Before this Court is a special civil action for certiorari1
and supplemental petition for mandamus,2 specifically
assailing National Power Board Resolutions No. 2002124
and No. 2002125, as well as Sections 11, 34, 38, 48, 52 and
63 of Republic Act (R.A.) No. 9136, otherwise known as the
Electric Power Industry Reform Act of 2001 (EPIRA). Also
assailed is Rule 33 of the Implementing Rules and
Regulations (IRR) of the EPIRA.
The facts of the case are as follows:
On June 8, 2001, the EPIRA was enacted by Congress
with the goal of restructuring the electric power industry
and privatization of the assets of the National Power
Corporation (NPC).
Pursuant to Section 483 of the EPIRA, a new National
Power Board of Directors (NPB) was created. On February
27,
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1 Rollo, pp. 5171.
2 Id., at pp. 295333.
3 Sec. 48. National Power Board of Directors.—Upon the passage of
this Act, Section 6 of Republic Act No. 6395, as amended, and Section 13
of Republic Act No. 7638, as amended, referring to the composition of the
National Power Board of Directors, are hereby repealed and a new Board
shall be immediately organized. The new Board shall be composed of the
Secretary of Finance as Chairman, with the following as members: the
Secretary of Energy, the Secretary of Budget and Management, the
Secretary of Agriculture, the DirectorGeneral of the National Economic
and Development Authority, the Secretary of Environment and Natural
Resources, the
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Secretary of the Interior and Local Government, the Secretary of the
Department of Trade and Industry, and the President of the National
Power Corporation.
4 Sec. 77. Implementing Rules and Regulations.—The DOE shall, in
consultation with relevant government agencies, the electric power
industry participants, nongovernment organizations and endusers,
promulgate the Implementing Rules and Regulations (IRR) of this Act
within six (6) months from the effectivity of this Act, subject to the
approval by the Power Commission.
5 Emphasis supplied.
430
Rule 336 of the IRR provided for the coverage and the
guidelines for the separation benefits to be given to the
employees affected.
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6 RULE 33. SEPARATION BENEFITS
Sec. 1. General Statement on Coverage.
This Rule shall apply to all employees in the National Government
service as of 26 June 2001 regardless of position, designation or status,
who are displaced or separated from the service as a result of the
Restructuring of the electricity industry and Privatization of NPC assets:
Provided, however, That the coverage for casual or contractual employees
shall be limited to those whose appointments were approved or attested by
the Civil Service Commission (CSC).
Sec. 2. Scope of Application.—This Rule shall apply to affected
personnel of DOE, ERB, NEA and NPC.
Sec. 3. Separation and Other Benefits.
(a) The separation benefit shall consist of either a separation pay and
other benefits granted in accordance with existing laws, rules and
regulations or a separation plan equivalent to one and one half (1½)
months’ salary for every year of service in the government, whichever is
higher: Provided, That the separated or displaced employee has rendered
at least one (1) year of service at the time of effectivity of the Act.
(b) The following shall govern the application of Section 3(a) of this
Rule:
(i) With respect to NPC officials and employees, they shall be
considered legally terminated and shall be entitled to the benefits
or separation pay provided in Section 3(a) herein when the
restructuring plan as approved by the NPC Board shall have been
implemented.
(ii) With respect to NEA officials and employees, they shall be
considered legally terminated and shall be entitled to the benefits
or separation pay provided in Section 3(a) herein when a
restructuring of NEA is implemented pursuant to a law enacted by
Congress or pursuant to Section 5(a)(5) of Presidential Decree No.
269.
With respect to the affected Bureaus of the DOE, their officials
and employees shall be considered legally terminated and shall be
entitled to the benefits or separation pay provided in Section 3(a)
herein when the reorganizational plan shall have been
implemented as a result of the Restructuring of the electric power
industry.
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(c) The governing board or authority of the entities enumerated in
Section 3(b) hereof shall have the sole prerogative to hire the separated
employees as new employees who start their service anew for such
positions and for such compensation as may be determined by such board
or authority pursuant to its restructuring program. Those who avail of the
foregoing privileges shall start their government service anew if absorbed
by any government agency or any governmentowned successor company.
(d) In no case shall there be any diminution of benefits under the
separation plan until the full implementation of the Restructuring of the
electric power industry and the Privatization of NPC assets in accordance
with the approved Restructuring and Privatization schedule.
(e) For this purpose, “Salary,” as a rule, refers to the basic pay
including the thirteenth (13th) month pay received by an employee
pursuant to his appointment, excluding per diems, bonuses, overtime pay,
honoraria, allowances and any other emoluments received in addition to
the basic pay under existing laws.
(f) Likewise, “Separation” or “Displacement” refers to the severance
of employment of any official or employee, who is neither qualified under
existing laws, rules and regulations nor has opted to retire under existing
laws, as a result of the Restructuring of the electric power industry or
Privatization of NPC assets pursuant to the Act.
Sec. 4. Funding.
Funds necessary to cover the separation pay under this Rule shall be
provided either by the Government Service Insurance System (GSIS) or
from the corporate funds of the NEA or the NPC, as the case may be; and
in the case of the DOE and the ERB, by the GSIS or from the general
fund, as the case may be. The Buyer or Concessionaire or the successor
company shall not be liable for the payment of the separation pay.
Sec. 5. Preferential Rights of Employees.
Displaced or separated personnel as a result of the Restructuring of the
electric power industry and Privatization of NPC assets shall be given
preference in the hiring of manpower requirements of the newlycreated
offices or the privatized companies: Provided, That the displaced or
separated personnel meet the prescribed qualifications. With respect to
employees who are not retained by NPC, the government, through the
Department of Labor and Employment (DOLE), shall endeavor to
implement retraining, job counseling, and job placement programs.
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Sec. 6. Implementation.
The DOE, NEA, and NPC, shall issue guidelines applicable to their respective
employees to implement this Rule within ninety (90) days from effectivity of these
Rules: Provided, That in the case of ERC, the independent quasijudicial body
created under the Act, the manner of, and timetable for, implementation of its
organization shall be governed by Section 38 and Section 39 of the Act.
7 See Rollo, pp. 198204. Pertinent portion of which reads:
RESOLVED FURTHER, That pursuant to Section 63 of the EPIRA and Rule 33
of the IRR, all NPC Personnel shall be legally terminated on January 31, 2003 and
shall be entitled to separation benefits as provided in the Guidelines hereunder
adopted.
8 Rollo, pp. 220223.
433
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9 Id., at pp. 170171. (Emphasis in original.)
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10 Italics supplied.
11 Francisco, Jr. v. Fernando, G.R. No. 166501, November 16, 2006,
507 SCRA 173, 179, citing People v. Cuaresma, G.R. No. 67787, April 18,
1989, 172 SCRA 415, 423424.
12 British American Tobacco v. Camacho, G.R. No. 163583, August 20,
2008, 562 SCRA 511, 534.
435
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13 Lacson Hermanas, Inc. v. Heirs of Cenon Ignacio, G.R. No. 165973,
June 29, 2005, 462 SCRA 290, 294 and Santiago v. Vasquez, G.R. Nos.
9928990, January 27, 1993, 217 SCRA 633, 652.
14 G.R. No. 156208, September 26, 2006, 503 SCRA 138.
436
437
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15 Id., at pp. 148150. (Emphasis Supplied.)
16 NPC Drivers and Mechanics Association v. National Power Corporation, G.R.
No. 156208, December 2, 2009, 606 SCRA 409.
438
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17 Id., at pp. 432433. (Emphasis in original.)
18 Id., at pp. 434435. (Emphasis in Original.)
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19 Canonizado v. Aguirre, 380 Phil. 280, 296; 323 SCRA 312, 326
(2000).
20 Dario v. Mison, G.R. No. 81954, August 8, 1989, 176 SCRA 84; Vide:
Dytiapco v. Civil Service Commission, G.R. No. 92136, July 3, 1992, 211
SCRA 88; Domingo v. Development Bank of the Philippines, G.R. No.
93355, April 7, 1992, 207 SCRA 766 and Parian v. Civil Service
Commission, G.R. No. 96535, October 15, 1991, 202 SCRA 772.
440
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The new thrust is to tap private capital for the expansion and
improvement of the industry as the large government debt and
the highly capitalintensive character of the industry itself have
long been acknowledged as the critical constraints to the program.
To attract private investment, largely foreign, the jaded structure
of the industry had to be addressed. While the generation and
transmission sectors were centralized and monopolistic, the
distribution side was fragmented with over 130 utilities, mostly
small and uneconomic. The pervasive flaws have caused a low
utilization of existing generation capacity; extremely high and
uncompetitive power rates; poor quality of service to consumers;
dismal to forgettable performance of the government power
sector; high system losses; and an inability to develop a clear
strategy for overcoming these shortcomings.
Thus, the EPIRA provides a framework for the restructuring of
the industry, including the privatization of the assets of the
National Power Corporation (NPC), the transition to a
competitive structure, and the delineation of the roles of various
government agencies and the private entities. The law ordains the
division of the industry into four (4) distinct sectors, namely:
generation, transmission, distribution and supply. Corollarily, the
NPC generating plants have to be privatized and its transmission
business spun off and privatized thereafter.”22
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21 G.R. No. 161113, June 15, 2004, 432 SCRA 157.
22 Id., at pp. 171172.
23 Rollo, p. 307.
441
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24 AN ACT TO PROTECT THE SECURITY OF TENURE OF CIVIL SERVICE OFFICERS
AND EMPLOYEES IN THE IMPLEMENTATION OF GOVERNMENT REORGANIZATION.
442
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25 Fernando v. Sto. Tomas, G.R. No. 112309, July 28, 1994, 234 SCRA
546, 552.
26 Rollo, p. 521.
27 Sec. 11. TRANSCO Board of Directors.—All the powers of the TRANSCO shall be
vested in and exercised by a Board of Directors. The Board shall be composed of a Chairman
and six (6) members. The Secretary of the Department of Finance (DOF) shall be the ex officio
Chairman of the Board. The other members of the TRANSCO Board shall include the
members to be appointed by the President, each representing Luzon, Visayas and Mindanao.
443
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The members of the Board so appointed by the President of the Philippines shall serve for a
term of six (6) years, except that any person appointed to fillin a vacancy shall serve only the
unexpired term of his/her predecessor in office. All members of the Board shall be professionals
of recognized competence and expertise in the fields of engineering, finance, economics, law or
business management. No member of the Board or any of his relatives within the fourth civil
degree of consanguinity or affinity shall have any interest, either as investor, officer or director,
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30 Italics supplied.
31 G.R. No. 83896, February 22, 1991, 194 SCRA 317.
445
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32 Id., at pp. 331334.
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33 Id., at pp. 334335.
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34 National Amnesty Commission v. Commission on Audit, 481 Phil. 279, 294;
437 SCRA 655, 657 (2004).
35 Id., at pp. 294295; p. 667.
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36 Thus, in Briad Agro Development Corporation v. Dela Serna, (G.R.
No. 82805, June 29, 1989, 174 SCRA 524) We upheld the grant of
concurrent jurisdiction between the Secretary of Labor or its Regional
Directors and the Labor Arbiters to pass upon money claims, among other
cases, “the provisions of Article 217 of this Code to the contrary
notwithstanding,” as enunciated in Executive Order No. 111. Holding that
E.O. 111 was a curative law intended to widen worker’s access to the
Government for redress of grievances, we held, “…the Executive Order
vests in Regional Directors jurisdiction, ‘[t]he provisions of Article 217 of
this Code to the contrary notwithstanding,’ it would have rendered such a
proviso—and the amendment itself—useless to say that they (Regional
Directors) retained the selfsame restricted powers, despite such an
amendment. It is fundamental that a statute is to be read in a manner
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that would breathe life into it, rather than defeat it.” (See also Philtread
Workers Union v. Confesor, G.R. No. 117169, March 12, 1997, 269 SCRA
393.)
37 In Heirs of Ardona v. Reyes, (G.R. No. 60549, October 26, 1983, 125
SCRA 221) We upheld the constitutionality of Presidential Decree No.
564, the Revised Charter of the Philippine Tourism Authority, and
Proclamation No. 2052 declaring certain municipalities in the province of
Cebu as tourist zones. The law granted the Philippine Tourism authority
the right to expropriate 282 hectares of land to establish a resort complex
notwithstanding the claim that certificates of land transfer and
emancipation patents had already been issued to them thereby making
the lands expropriated within the coverage of the land reform area under
Presidential Decree No. 2, and that the agrarian reform program occupies
a higher level in the order of priorities than other State policies like those
relating to the health and physical wellbeing of the people, and that
property already taken for public use may not be taken for another public
use. We held that, “(t)he petitioners have failed to overcome the burden of
anyone trying to strike down a statute or decree
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whose avowed purpose is the legislative perception of the public good. A
statute has in its favor the presumption of validity. All reasonable doubts
should be resolved in favor of the constitutionality of a law. The courts will
not set aside a law as violative of the Constitution except in a clear case
(People v. Vera, 65 Phil. 56). And in the absence of factual findings or
evidence to rebut the presumption of validity, the presumption prevails
(ErmitaMalate Hotel, etc. v. Mayor of Manila, 20 SCRA 849; Morfe v.
Mutuc, 22 SCRA 424).”
In the same manner, we upheld in Dumlao v. Commission on Elections
(G.R. No. L52245, January 22, 1980, 95 SCRA 392) the first paragraph of
Section 4 of Batas Pambansa Bilang 52 providing that any retired elective
provincial, city or municipal official, who has received payment of the
retirement benefits and who shall have been 65 years of age at the
commencement of the term of office to which he seeks to be elected is
disqualified to run for the same elective local office from which he has
retired. Invoking the need for the emergence of younger blood in local
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The universal charge shall be a nonbypassable charge which shall be
passed on and collected from all endusers on a monthly basis by the
distribution utilities. Collections by the distribution utilities and the
TRANSCO in any given month shall be remitted to the PSALM Corp. on
or before the fifteenth (15th) of the succeeding month, net of any amount
due to the distribution utility. Any enduser or selfgenerating entity not
connected to a distribution utility shall remit its corresponding universal
charge directly to the TRANSCO.
The PSALM Corp., as administrator of the fund, shall create a Special
Trust Fund which shall be disbursed only for the purposes specified
herein in an open and transparent manner. All amount collected for the
universal charge shall be distributed to the respective beneficiaries within
a reasonable period to be provided by the ERC.
39 G.R. No. 159796, July 17, 2007, 527 SCRA 696.
40 Id., at p. 726.
453
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41 Rollo, p. 159.
42 Sec. 38. Creation of the Energy Regulatory Commission—There is
hereby created an independent, quasijudicial regulatory body to be
named the Energy Regulatory Commissions (ERC). For this purpose, the
existing Energy Regulatory Board (ERB) created under Executive Order
No. 172, as amended, is hereby abolished.
The Commission shall be composed of a Chairman and four (4)
members to be appointed by the President of the Philippines. The
Chairman and the members of the Commission shall be naturalborn
citizens and residents of the Philippines, persons of good moral character,
at least thirtyfive (35) years of age, and of recognized competence in any
of the following fields: energy, law, economics, finance, commerce, or
engineering, with at least three (3) years actual and distinguished
experience in their respective fields of expertise: Provided, That out of the
four (4) members of the Commission, at least one (1) shall be a member of
the Philippine Bar with at least ten (10) years experience in the active
practice of law, and one (1) shall be a certified public accountant with at
least ten (10) years experience in active practice.
Within three (3) months from the creation of the ERC, the Chairman
shall submit for the approval by the President of the Philippines the new
organizational structure and plantilla positions necessary to carry out the
powers and functions of the ERC.
The Chairman of the Commission, who shall be a member of the
Philippine Bar, shall act as the Chief Executive Officer of the Commission.
All members of the Commission shall have a term of seven (7) years:
Provided, That for the first appointees, the Chairman shall
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hold office for seven (7) years, two (2) members shall hold office for five
(5) years and the other two (2) members shall hold office for three (3)
years; Provided, further, That appointment to any future vacancy shall
only be for the unexpired term of the predecessor: Provided, finally, That
there shall be no reappointment and in no case shall any member serve
for more than seven (7) years in the Commission.
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43 Rollo, p. 158.
44 Id., at p. 159.
45 G.R. No. 150974, June 29, 2007, 526 SCRA 1.
46 Id., at pp. 89.
47 Id., at p. 25.
456
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48 Sec. 63. Separation Benefits of Officials and Employees of Affected
Agencies.—National government employees displaced or separated from
the service as a result of the restructuring of the electricity industry and
privatization of NPC assets pursuant to this Act, shall be entitled to either
a separation pay and other benefits in accordance with existing laws, rules
or regulations or be entitled to avail of the privileges provided under a
separation plan which shall be one and onehalf month salary for every
year of service in the government: Provided, however, That those who
avail of such privilege shall start their government service anew if
absorbed by any governmentowned successor company. In no case shall
there be any diminution of benefits under the separation plan until the
full implementation of the restructuring and privatization. Displaced or
separated personnel as a result of the privatization, if qualified, shall be
given preference in the hiring of the manpower requirements of the
privatized companies. The salaries of employees of NPC shall continue to
be exempt from the coverage of Republic Act No. 6758, otherwise known
as “The Salary Standardization Act.” With respect to employees who are
not retained by NPC, the government, through the Department of Labor
and Employment, shall endeavor to implement retraining, job counseling,
and job placement programs.
49 G.R. No. 166570, December 18, 2009, 608 SCRA 475.
457
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50 An Act to Create and Establish a “Government Service Insurance
System,” To Provide for its Administration and To Appropriate the
Necessary Funds Therefor.
51 An Act Further Amending Section Twelve of Commonwealth Act
Numbered One Hundred EightySix, As Amended, By Prescribing Two
Other Modes of Retirements and for Other Purposes.
52 An Act To Amend Commonwealth Act Numbered One Hundred and
EightySix Entitled “An Act to Create and Establish a Government
Service Insurance System, To Provide for its Administration and To
Appropriate the Necessary Funds Therefor,” and to Provide Retirement
Insurance and For Other Purposes.
53 Amending, Expanding, Increasing and Integrating the Social
Security and Insurance Benefits of Government Employees and
Facilitating the Payment Thereof Under Commonwealth Act No. 186, As
Amended, and For Other Purposes.
54 An Act Amending Presidential Decree No. 1146, As Amended,
Expanding and Increasing the Coverage and Benefits of the Government
Service Insurance System, Instituting Reforms Therein and For Other
Purposes.
458
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55 Entitled as National Power Corporation v. The Napocor Employees and
Workers Union (NEWU), NAPOCOR Employees Consolidated Union (NECU), NPC
Executive Officers Association, Inc. (NPCEXA), Esther Galvez and Efren Herrera,
for and on their behalf and on behalf of other separated, unrehired, and retired
employees of the National Power Corporation, the Department of Budget and
Management (DBM), the Office of the Solicitor General (OSG), the Civil Service
Commission (CSC), and the Commission on Audit (COA).
56 Rollo, (Herrera v. NPC, G.R. No. 166570), pp. 4044.
459
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57 Underscoring ours.
58 Rollo, (Herrera v. NPC, G.R. No. 166570), p. 44. (Emphasis supplied.)
59 Id., at p. 13.
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60 Id. (Emphasis supplied.)
61 Herrera v. NPC, supra note 49, at p. 495.
62 G.R. No. 166377, November 28, 2008, 572 SCRA 487.
63 G.R. No. 87653, February 11, 1992, 206 SCRA 118, 122.
461
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x x x x
THE CHAIRMAN (SEN. J. OSMENA). Well, the other labor
representation here is Mr. Anguluan.
MR. ANGULUAN: Yes, Your Honor.
THE CHAIRMAN (SEN. J. OSMENA). Okay. Will you present
your paper?
MR. ANGULUAN: We have prepared a paper which we have sent
to the honorable members of the Bicam. x x x.
THE CHAIRMAN (SEN. J. OSMENA). I don’t think anyone is
going to deprive you of your rights under the law. You will
enjoy all your rights. You will receive retirement benefits,
separation pay, and all of the rights that are provided to
you
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64 Santos v. Servier Philippines, Inc., supra note 62, at p. 496.
65 TSN, Joint Congressional Power Commission, January 23, 2002, 11:31 p.m.,
p. 1.
462
x x x x
THE CHAIRMAN (REP. BADELLES). They will still be subject to
the same conditions. Meaning, NPC has the discretion whether to
reabsorb or hire back those that avail of the separation benefits.
SEN. OSMENA (J). No. But they are not being the plants are
not being sold, so they are – but what we are giving them is a
special concession of retiring early.
No, okay. You consider . . .
THE CHAIRMAN (REP. BADELLES). We are not speaking of
retirement here, we are speaking of their separation
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benefits . . .
SEN. OSMENA (J). Okay, separation benefits.
THE CHAIRMAN (REP. BADELLES). Precisely, if they are
considered terminated.
SEN. OSMENA (J). All right. Separation . . .
THE CHAIRMAN (REP. BADELLES). A retirement plan is a
different program than separation.
SEN. OSMENA (J). Separation benefits, okay.
THE CHAIRMAN (REP. BADELLES). All right.67
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66 TSN, Public Consultative Meeting on the Power Bill, February 16,
2001, pp. 114117. (Emphasis and underscoring supplied.)
67 TSN, February 12, 2002, Joint Congressional Power Commission,
pp. 12. (Emphasis supplied.)
463
69
R.A. No. 1616. It could not have meant
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68 R.A. No. 660, R.A. No. 728, R.A. No. 1123, R.A. No. 1573, R.A. No.
1616, R.A. No. 1820, R.A. No. 3096, R.A. No. 3175, R.A. No. 3544, R.A. No.
3593, R.A. No. 4066, R.A. No. 4781, R.A. No. 4847, R.A. No. 4968, P.D. No.
712, P.D. No. 1146, and R.A. No. 8291.
69 Under R.A. 1616, any official or employee who has rendered at
least 20 years of service, the last three (3) years of which are continuous,
and has been in the government service before May 31, 1977, is entitled to
gratuity benefits. The benefit shall be computed and paid by the last
employer, subject to the availability of funds. In such a case, the
GSIS will refund the retiree’s personal contributions with interest and the
corresponding government con
464
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tributions without interest. R.A. No. 1616 was eventually phased out
impliedly by the fourth whereas clause of P.D. 1146. (Emphasis supplied.)
70 R.A. No. 660 refers to the annuity (pension) retirement benefit
under a scheme popularly known as Magic 87. Under said law, a member
of the GSIS Retirement Insurance Fund may avail of said benefits when
his age and years of service has a combined total of 87, as long as his last
three years with the government was continuous. The benefits may vary
depending on the age of the retiree but all will receive a monthly pension
for life after 5year period after retirement.
71 A retiring member under P.D. No. 1146 is entitled to either old age
pension or cash payment, depending on his age and years in service.
Retirement under P.D. No. 1146 can only be availed by those who were in
service after May 31, 1977 but prior to June 24, 1997. The Basic Monthly
Pension (BMP) is available for retirees who are at least 60 years old and
have rendered 15 years of service. Those qualified under this option will
receive a Basic Monthly Pension (BMP) guaranteed for five (5) years.
After the 5year guaranteed period, he/she will receive a basic monthly
pension for life. A retiree may also request to convert his/her fiveyear
guaranteed BMP into a lump sum subject to a six (6) percent discount
rate.
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72 R.A. No. 8291, which took effect on June 24, 1997, increased the
benefits under PD 1146. Under R.A. No. 8291, a government employee
who has rendered at least 15 years of service and who has reached the age
of 60 is entitled to a retirement benefit. Under Section 13 of R.A. No.
8291, the “Retirement benefit shall be:
(1) the lump sum payment as defined in this Act payable at
the time of retirement plus an oldage pension benefit equal to the
basic monthly pension payable monthly for life, starting upon
expiration of the fiveyear (5) guaranteed period covered by the
lump sum; or “(2) cash payment equivalent to eighteen (18) months
of his basic monthly pension plus monthly pension for life payable
immediately with no fiveyear (5) guarantee.
465
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466
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76 Id., at p. 7; see also Bengzon v. Drilon, G.R. No. 103524 and A.M. No.
918225CA, April 15, 1992, 208 SCRA 133, 152. (Emphasis and
underscoring supplied.)
77 GSIS v. Montesclaros, G.R. No. 146494, July 14, 2004, 434 SCRA
441, 449.
467
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78 Section 10. No law impairing the obligation of contracts shall be
passed.
468
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79 Supra note 14.
80 People v. Vera, 65 Phil. 56, 135 (1937).
81 Lacson v. The Executive Secretary, 361 Phil. 251, 263; 301 SCRA
298, 311 (1999).
82 G.R. No. 144158, April 24, 2007, 522 SCRA 12.
83 Id., at pp. 2122.
469
SO ORDERED.
Petition dismissed.
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